And, lest you think its all the men doing the irresponsible spending, Mrs. Kathy Fuld is front and center in an article about rich women hiding their designer purchases in unlabeled bags (kind of like the tranched mortgages her husband sold).
Here is what $5000 can buy you, at www.net-a-porter, and ITS ON SALE, down from $8,435!!!!! Its a plain sheath dress, with gilded embroidered wings, because when you go to your $1000-a-plate fundraising dinners where you can buy fur in private, you are an angel:
Perhaps you’d like to add in some sparkling shorts, that went from $1000 to 776 ON SALE - geez, the price, is almost patriotic, isn’t it? You’d buy them if they were $1,776, I bet.
And if you are looking for some work boots, something to take you around town like regular working people, how about these python boots?
available for only $2,580…
And, since you order via the internet, no need to be embarrassed about your excessive, gaudy shopping while the rest of the country can’t make their mortgage payments because your husband decided to sell financial instruments that have no actual money in them, except of course the money to be made by selling those crazy financial instruments… does that make sense? no? well, that’s okay, she’s go to run, has to stop in to a favorite storefront to buy a few more $2500 cashmere blankets…
Usually when you pay your CEO huge bucks, its because he/she (let’s be honest, its almost always a he, so no need to be politically correct here), brings in the bacon. They get paid millions, because the asset, the corporation, increases in value for shareholders. You get paid, therefore, to produce.
Why, then, have bank CEO’s been paid bonuses and salaries and stock options worth 1.6 billion in 2007? In 2008, they’re all bankrupt and need bailouts. That’s not ‘bringing in the bacon’, that’s fraud.
In an article in the New York Times, by Stephanie Clifford, we hear the feeble excuses of a formerly trusted ‘expert’, The Economist Magazine, who blew it:
“About 2008: sorry,” reads a note from the issue’s editor, Daniel Franklin, in the prediction edition for 2009. Who would have seen the financial crisis coming, Mr. Franklin asked? “Not us. The World in 2008 failed to predict any of this,” he said.
In what could be the most ridiculous statement of 2008, The Economist said ‘oops, we didn’t see it coming’ to the recession that is enveloping the globe.
WTF?
They’re not Sunset Magazine, or Veranda Magazine, or SciFi Magazine. They are ‘The Economist’. They seriously did not see this coming?
The housing market contracted. Regular people shared viral videos about how banks were way, way beyond their normal lending limits, extended beyond their usual loan-to-capital ratios, but the Economist didn’t know?
Wages stayed stagnant, prices for everything rose, two-income families were suffering. Who was in charge of that magazine, if they didn’t foresee a global slowdown. Books like ‘Trillion Dollar Meltdown‘, ‘Bad Money‘ and ‘The Limits of Power: The End of American Exceptionalism‘ dared to broach what Americans did not want to hear, that we are a nation deeply in debt, at war in a war we can not afford, wasting away our infrastructure with starving citizens who can’t make ends meet, debasing our currency, losing our pre-eminence in the global economy. Sure the books were published in 2008, but they were written in 2006 and 2007 based on information The Economist had access to and reported.
The Economist ‘did not see this coming?’
I did. I sold my house and got out of a million dollar mortgage because I could see a real estate slowdown and I made tough decisions before the undertow hit. My realtor, Warren Mullen, saw the slowdown coming. Anyone who took out a second or third mortgage saw it coming, when they suddenly had a harder time qualifying. Money was leaving the lending markets by mid 2007. Credit card companies jacked up their rates to cardholders, in 2007 and contracted their offers of available credit to new cardholders.
Either I am entirely prescient and should be paid on salary by magazines, the government and private industry, or The Economist whiffed on this one and is now taking the ‘We’re sorry, we didn’t know’ route.
In an interview, Mr. Franklin shrugged at the bad calls. “It’s nice to be right, but it’s not the only point of this,” he said. “Part of it is to say what’s going to be on the global agenda.” In store for the coming year, The Economist says, is an older work force, a recession and a boom in Blu-ray disc sales.
Blu-ray sales? An older workforce? That’s The Economist’s 2009 predictions?
How about a huge unemployed % of American workers who no longer have health insurance? How about municipalities bankrupt? How about a currency and monetary system entirely debased by the Federal Reserve and now trillions of dollars of created money, TARP?
I understand that President Bush didn’t understand this was going to happen, but that’s because he chooses to live in a rarified elitist world, joshing in his tuxedo that ‘the rich are his base’.
But a magazine called The Economist? You can’t ask to be seen as an expert and then wave your hand dismissively, ’so sorry’, when the curtains get pulled back by the little dog, like the Wizard of Oz.
Donald Trump filed a lawsuit in Chicago to be relieved from his payments to Deutsche Bank, based on a ‘Force Majure’ clause in his loan documents. This clause ‘allows the borrower to delay completion of the building if construction is delayed by things like riots, floods or strikes. That clause has a catchall section covering “any other event or circumstance not within the reasonable control of the borrower,” and Trump figures that lets him out, even though construction is continuing.
He wants a state judge in New York to order the bank to delay efforts to collect the loan until “a reasonable time” after the financial crisis ends.
Deutsche Bank thinks the idea that an economic downturn should free people from the obligation to pay their debts is laughable.
It pays to be rich, doesn’t it? To be able to add clauses to contracts that protect you, but not to allow the same protection to people who buy from you. There is a bible story about a lender who can’t pay his own debt to the king… The king forgives the debt, the lender goes home and tries to collect from someone poorer than he, the king hears and blows his top, throwing the man he forgave into prison for not sharing the loan forgiveness.
The Donald should be offering leniency to his purchasers if he’s going to argue for his own release.
The banks are taking bailout billions but holding their mortgagees over the usual payment fires. I agree with Reich. The bailout should be shunted past the banks, to the real customers, the payees of these overly aggressive mortgages. I’d cut the house values to what www.zillow.com has, minus an additional 30% off, then force banks to only try to collect that amount. They took the risk on the upside, they should take the risk on the downside.
Brown-Forman’s balance sheet remained strong and the company continued to operate during the six month period with an “A2” rating from Moody’s and an “A” rating from Standard & Poor’s (yes, we now know the ratings agencies gave ratings in certain industries without knowing a rat’s a** about the actual values of questionable assets they were looking at).
AND, the company’s Board of Directors has authorized the repurchase of up to $250 million of its outstanding Class A and Class B common shares over the next 12 months, subject to market conditions, getting their corporate value OUT of the public domain.
Even though I think America is Schizophrenic about its drugs
- they say that liquor is fine for us to drink on a daily basis
but anything else
and you go to jail -
B-F’s growth shows that corporations CAN addict their customers AND be financially viable. Who knew?
I wonder if B-F’s Board would like to get into the car making business? I hear there’s 35 billion up for grabs…
Union autoworkers are being flayed this week, for supposedly making $70 an hour. They are, of course, blamed for the downfall of our three automakers.
Problem is: its not true. They make $41 an hour, at most, and that is not CASH. That includes health care costs and retirement costs.
The auto companies played with their numbers and added in the value of future retirement costs of current workers and health insurance and retirement benefits for retired workers:
The New York Times publishes an incendiary accusation, blaming workers for the failure of automakers, with no correction. The automakers, who could have righted their ships a long time ago by simply listening to peak oil analysts and global warming scientists, decided to stay their unsustainable course, building HUGE gas guzzlers, while their executives flew private jets to Congress, asking to be relieved of the pain of ‘high wages of line workers’.
The autoworkers might actually NEED their unions, to protect them from the lies and false blame of their employers…
They’ve been unfairly hung out to dry by automakers who took jobs out of the US, destroyed communities, refused to be sustainable and now want the US taxpayer to clean up after their bullying, blame-dodging behavior.
Amazing. Its so kind. Its so thoughtful. It asks its people to come in for help… It talks of community and why each part of the community is important to the whole.
I wish our government could come up with a letter like this, and every single company that takes a dollar of bailout money should send out letters like this…
Dear Alumni and Friends,
I write regarding the University of San Francisco’s response to the nation’s economic downturn. The University, like you and your family, is paying close attention to its finances, even as we hope for a quick recovery in the borrowing markets and employment outlook.
USF is approaching this challenge from a position of enrollment strength. In the last 10 years, applications to USF have doubled. They are up 36% in the last three years alone, resulting in a waiting list of several hundred qualified applicants to whom we could not extend an offer of admission. We are also experiencing an increase in applications for the spring semester, 2009. Alumni and friends have played important roles in this increase. I thank you for your referrals and ask that you continue to encourage potential students to visit our campus and apply for admission and financial aid.
Help for Our Students
Nevertheless, we are concerned for our students and their families. Some families will face job loss or experience a reduction in available funds from sources such as home equity loans. Accordingly, this week, I am sending a letter to all undergraduates and their parents, and to all graduate students, promising personalized attention if financial issues threaten their ability to continue at USF. They will be encouraged to email Susan Murphy, Financial Aid Officer at usfcares@usfca.edu.
Also, I am asking the Board of Trustees for the lowest tuition increase in more than thirty years, and for an increase in university-funded financial aid for the 2009-2010 academic year. Now, more than ever, USF is committed to doing everything possible to continue to enroll and graduate all deserving students regardless of backgrounds.
Tightening Our Belts
The University is redoubling its efforts to be fiscally responsible and plan prudently for the potential impact of the downturn on our campus. Each Dean and Vice President is identifying ways to reduce costs and operate more efficiently, emphasizing reductions that do not compromise the high quality of our Jesuit education or the services we provide to students. With cooperation from every corner of campus, we have cut $8.5 million from this year’s operating budget. Examples of these cuts include restricting travel expenses and replacing desktop computers every four years instead of every three. We have also implemented a hiring freeze on most positions.
Reducing expenses is only part of the solution. I have also asked the Deans and Vice Presidents to identify ways we can increase revenue. We have a number of promising opportunities to expand and create new programs, often in areas where a modest investment could add significantly to our bottom line.
Looking Ahead
We do not know where this economy will lead us, but I am confident that USF has the talent and processes in place that will allow us to act nimbly and responsibly. Our community has distinguished itself over 153 years in times like these and even worse. The great San Francisco earthquake and fire of 1906 leveled our campus, but like the phoenix, we emerged from the ashes even stronger. Personal care for our students and prudent management will position the university for growth in the years ahead.
The USF Community
As an alumnus or friend of the University of San Francisco, you are in my thoughts, and I pray that you find the strength to overcome adversity in these uncertain times. I am sure that those who are struggling will find support among other members of the USF community, both on-campus and off.
If you have any comments or suggestions on how USF might address the challenges we face, I invite you to send them to me at: privett@usfca.edu. During this Thanksgiving season, may the serious economic challenges we face not blind us to the many blessings that we enjoy.
What were they expecting? Weren’t they (apparently economists, or Wall Street, or the US Government, or who knows?) watching or speaking with Main Street?
Because everyone I know cut back their spending last holiday season, watching home prices tumble 15% between November 2007 and February 2008. Homes sat on the market, abandoned by the giddy, easy money buyers of the 1990’s. Homeowners have been worried about the ratcheting up of interest payments on their Adjustable Mortgages or Lines of Credit, scheduled for end of 2008/early 2009. Real estate agents have tried to sell homes with negative equity, for at least ten months. The huge bank-offered rollercoaster rides of ‘free money’, using your home as an ATM, had already slowed to a crawl by mid 2007. And this isn’t because homeowners suddenly found ‘financial religion’, its because the greedy leeches, the banks and the shadow banking industry who sold loans to homeowners, had sucked all the rich blood out and were pulling back from the kill.
Shadow banks had to carry a loan for only 3 months in order to keep their high fees. So they gave out loans, handed out tens of thousands and hundreds of thousands of dollars, hoping their hapless debtees could make three months of payments so they could sell off the loans to bigger financial idiots than themselves.
Now we’re bailing out the big financial idiots, as though they deserve it. And we’re SHOCKED? that Middle America has pulled back on spending?
Ask any parent, ask any business owner, ask any employee. They’ve been crunching their numbers for over a year, wondering what variable (credit cards, mortgage, home equity line of credit, business loan) is going to be the eye of the tornado that finally plucks them from their safe spot and destroys them.
Seriously, if this tumble is WORSE THAN EXPECTED, then someone making money as an analyst or an economist should be fired and I should have that job. I have been watching home prices, watching my own budget, watching families around me, watching my community. Its been obvious for over a year that very serious, very dangerous financial grumblings are erupting.
Um, spending for momentary pleasure appears to be ‘off’,
While dollars are still flowing for Ferraris, Rolls Royces and Maseratis. Who knew? Another factoid that shows rich Americans are looking for VALUE with their spending in this recession?
So, poor guys have to negotiate with the women at brothels for basic services, negotiating DOWN in price, while the super-rich, who already raped the financial system, are able to buy luxury cars for hundreds of thousands of dollars, because the purchase is only a SMALL percentage of their net worth.
